Frustrated with the Caribbean Banks?

The Challenges of Banking in the Caribbean

For a lot of our clients, the thought of having difficulty qualifying for a bank mortgage or worse, not being able to at all, is an unusual development. At home, their banks can’t seem to lend them enough money, so why are things so hard with these banks?

There are actually a number of reasons for this, so of them are legitimate while others are just one of the challenges of dealing in the Caribbean. Here are just a few of the legitimate reasons clients have a hard time.

1. You are a non resident in this country, normal lending guidelines do not apply to you. If someone were to come to the US or Canada and want to buy a home as a non resident, they would face the same challenges. For example, buying a home with 10 or 15% down only doable due to special programs to get citizens into their homes; these programs are not there for people of other countries to buy in your country. This applies to the Caribbean countries as well, you will need a minimum of 30-35% down payment.
2. In the US and Canada, they have special programs for self employed clients to qualify for a mortgage. Most (if not all) countries in the Caribbean do not have these same ‘low doc’ programs, meaning you have to show enough money on your tax returns to qualify.
3. Qualifications are different, and often make it more difficult to qualify. An example of this, is using your full credit capacity versus the amount of debt you actually carry. For clients with large limits on their lines of credit or credit cards, this is going to make qualification tough.

Now the not so obvious reasons why qualifying for a mortgage in the Caribbean can be tough.

1. Things move slower in the Caribbean. You may not have been declined, your deal may simply take a long time to get approved.
2. Regardless of whether you qualify or not, big mortgages can scare some lenders off. Sometimes its not the bank, but the banker who fears a costly mistake may cost them their job.
3. Banks in the Caribbean for the most part are not ‘all in’ at this point. They are wiling to take your deposits but they are not real keen on lending it out. So, you may just be a victim of circumstance where the bank does not want to lend money at this time.

This is Why Private Financing is so Prevalent

Due to the banks being such a challenge through most of the Caribbean, private lenders are filling the gap in the market. Private mortgages are lower loan to value options, with higher rates and fees, but they are a reliable source of funding in the markets they are available.

We offer private financing in a number of locations, but not all. Location, loan amount, marketability and borrower strength all play a part in determining the viability of these loans. Talk to us today about our mortgage options and whether a private mortgage may make your dream of vacation home ownership a reality!